Emergence of Mixed Reality & LLM Wars
Emergence of Mixed Reality & LLM Wars
Hartmann Capital Newsletter, Friday November 17th, 2023
After six months in quiet R&D, upgrading our digital asset trading division, and successfully closing our first venture fund, Hartmann Capital returns to your inbox with regular weekly updates, sharing both news, research and opinion pieces covering the frontier worlds’ of crypto, XR, AI & gaming.
In this issue
The Rise of Mixed Reality Applications by JP Minetos
OpenAI Developer Day & Latest in GenAI by Daniel Derzic
Next Week: the Evolution of Game Token Economies by Jonas Luckhardt
The Rise of Mixed Reality Applications
Written by XR & Gaming Analyst JP Minetos; Edited by Felix Hartmann
When it comes to head mounted display technology, descriptive words are commonly tossed around lackadaisically: Virtual Reality, Mixed Reality, Augmented Reality, Spatial Computing, the Metaverse, HMDs, etc.
The terms often overlap and are (at times in error) used interchangeably. As the industries are emerging, the language around them is still evolving. Definitions therefore are a good place for us to start:
Virtual Reality (VR) - Fully immersive, 3D dimensional rendered environments where users have spatial presence without anything “real” in their field of view, portrayed in a head-mounted display as the form factor.
eg. Beat Saber, Gorilla Tag, Job Simulator
Mixed Reality (MR) - A 3D re-projection of our ‘real’ surroundings enhanced and ‘mixed’ with virtual elements and interactive 3D experiences, gameplay, or more. Since 2023 part of the same device as VR (e.g. Quest3 & Apple Vision Pro)
e.g. PianoVision, Demeo
Augmented Reality (AR) - An analog vision of your ‘real’ surroundings overlayed with digital media and enhacements. AR is most commonly experienced through our mobile phones, but new devices resembling glasses are coming to market (e.g. Magic Leap).
Eg Pokemon Go, Apple Measurements App, Snapchat Filters
While definitions change amongst parties over time, Apple’s term of “Spatial Computing” has done the most to capture all of the aforementioned definitions into a catch all.
Headsets such as the Meta Quest, Valve Index, HTC Vive, Pico and others have largely been classified as VR headsets, as the core user loop was expressed inside fully immersive virtual worlds.
While this has been the most dominant expression of spatial computing, mixed reality has often been praised as the next generation of spatial experiences.
While both VR and MR have their own strengths and weaknesses, here are a few highlights of what MR brings to the world:
Situational awareness and inclusion - MR blends reality with the virtual rather than fully cutting a user off
Increased Play Space - Boundaries are increased to your entire living space
Interaction with real world objects - Mixed Reality lets users interact with physical objects around them.
The Next Generation of Headsets
While the idea of MR based software has always been alluring, consumer grade MR has been an afterthought in headset design, catalyzed by either form-factor or cost. Until recently MR display capabilities have been black & white with grainy quality, ultimately creating subpar experiences using the technology.
In 2023 however, MR took a big leap forward.
While the Apple Vision Pro is yet to launch, most of the promotional footage is portraying mixed experiences: games, movies, entertainment, education all overlayed atop a users surroundings, removing the isolation of VR.
Meta has doubled down on MR - originally with the enterprise Quest Pro, but now with full color passthrough on the Quest 3. Users are now able to interact with many Meta apps in MR, as well as social homes and desktop overlays.
This has unlocked a new set of applications that were not possible before, attracting a new cohort of developers. This increases the TAM for both spatial computing hardware and software. Meta is actively supporting this with internal initiatives such as grants and developer tools to incentivize building. And while the VisionPro has yet to launch, Apple has already released their VisionOS toolkit for developers.
What type of content will we see?
In this nascent stage of MR development, the canvas is vast, waiting to be painted with innovative applications. Social interactions redefine connectivity, turning homes into ever-changing digital meeting spots. Gaming transcends traditional confines, converting local environments into virtual playgrounds. Productivity takes a leap forward, with creation, design, and prototyping seamlessly integrated into reality. Education undergoes a paradigm shift, offering learners the opportunity to visualize and interact with virtual objects.
As MR reveals its potential, it draws a new wave of users who desired the augmented age, yet were deterred by the encasement of fully immersive virtual worlds. The allure of full-color passthrough becomes a catalyst, propelling us into an era where the boundaries between the real and the virtual dissolve, and the possibilities are limitless.
OpenAI Dev Day & Latest in Generative AI
Written by AI & Metaverse Associate Daniel Derzic; Edited by Felix Hartmann
According to a Consumer Navigator survey, 61% of consumers have a basic or advanced understanding of generative AI. This trend is more prevalent among younger generations, with Millennials leading the way. Despite increases in AI literacy, 13% of the population is still unaware of this technology. These insights are crucial, reflecting a developing market becoming more receptive to technological advancements.
As consumer awareness, understanding, and usage rise, large tech players compete for domination and public favor.
The AI Race: Who will lead with the best AI-Language Models?
Chatbots are the most popular use case for generative AI. This has been significantly influenced by the launch of ChatGPT in November 2022. Its debut signaled a turning point, showcasing the potential of AI in people’s everyday lives.
Despite OpenAI’s head-start, it became quickly evident that both upstarts and big tech would contend for marketshare of the what has become the fastest growing product and technology in our history.
While Microsoft planted its flag in OpenAI, both Amazon and Google, recently backed AI startup Anthropic, with Google committing as much as $2 billion in October. Anthropic provides an AI chatbot, Claude, similar to ChatGPT.
Further, Google is rumored to invest hundreds of millions of dollars in Character.AI, a company specialized in creating virtual characters that allow consumers to engage with AI versions of celebrities and fictional characters.
The challenge isn't just figuring out who can create the most powerful AI chatbot, but also identifying which organization will eventually lead the pack. Competitors include ChatGPT, known for its early lead; Meta AI, which is pioneering real-time information retrieval; and Grok, which, despite only four months of development, comes with bold assertions from Elon Musk.
Additionally last week, Samsung introduced its "Gauss” model, which will likely be used in the next Samsung smartphones and tablets, including the Galaxy S24.
The race is far from over, but one thing is certain: chatbots are evolving quickly, which will significantly influence how we use technology daily.
OpenAI Dev Day
A major update for ChatGPT is the introduction of GPT-4 Turbo, which supports a 128,000-character context. However, it's important to note that even with this expanded capability, keeping the context as short as possible is advisable due to a significant performance drop with longer contexts.
OpenAI has also introduced customizable GPTs that can be improved for specific tasks and contexts. Users can set them up using simple language instructions, making it easier for people to create tools without needing a lot of programming knowledge. They also announced that they will soon launch the GPT store, where those GPTs will be distributed.
Some interesting ones to test include your Startup Guide, Travel Assistant, and personal AI Nutrionist.
The firm has also started a Copyright Shield program that helps to cover legal fees for customers who face lawsuits related to intellectual property.
Companies such as OpenAI, Meta, and others are competing to be the best, but it's not just about them. It is also about the users. Our lives may become easier and more exciting with new AI features in our phones and laptops. We're approaching a day when speaking with a machine will be as natural as talking with a friend.
The Humane AI Pin, for example, which costs $699 with a $24 monthly membership, represents a step further in this direction and debuted last week. This gadget is essentially a smartphone without a screen, and it allows the user to engage with his environment in new ways, such as analyzing the nutritional content of food or connecting with someone from a different culture. However, some may view these features as more playful than practical.
The device magnetically attaches to clothing and includes a battery pack. It also has a green laser projector and a gesture-controlled touchpad.
Humane has raised $230 million and wants to redefine our interactions with AI. It will be interesting to see if this funding and idea is enough to compete with giants like Meta, Samsung, or Apple.
Disclaimers:
This is not an offering. This is not financial advice. Always do your own research.
Our discussion may include predictions, estimates or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.
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